Pinewood Technologies Asia Pacific Limited v Pinewood Technologies PLC

When a party fails to pay a judgment debt ordered during ongoing litigation, the court may extend the time for payment and make continuation of the claim conditional on payment. The Denton framework applies to an application for further time. A debarring or unless order is a remedy of last resort. Before making it, the court must consider the seriousness of the breach, the reason for default, the evidence of means and funding, alternative enforcement mechanisms, access to justice, proportionality and the interests of justice. Detailed and cogent evidence is required where impecuniosity is relied upon. Where no realistic alternative enforcement exists and the default is deliberate and continuing, an unless order may be proportionate to protect the administration and credibility of the court’s orders.

The claimant pursued a claim concerning alleged breaches of reseller agreements and the defendant succeeded on reverse summary judgment on most of the claim, while also obtaining judgment on its counterclaim and an order for payment of specified sums and costs. The claimant did not pay within the period required by Civil Procedure Rules 1998, CPR 40.11.

The claimant sought further time to pay. The defendant sought an unless order providing that the claim would be struck out if the judgment debt was not paid. The claimant relied on limited resources and litigation funding, but gave little evidence about the funders, the source of proposed payments or its ability to raise funds. The central issues were whether time should be extended and whether continuation of the claim should be made conditional upon payment.

1. Extension of time. The court applied the three-stage approach in Denton v TH White Ltd: assess the seriousness and significance of the breach, identify why it occurred, and consider all the circumstances. Non-payment of the judgment debt was not trivial. The explanation that resources had been used on an appeal and foreign disclosure applications did not explain the failure to pay an order which the claimant acknowledged was due.
2. The evidence was inadequate. It did not show whether the litigation funders could satisfy the debt, explain the source or basis of earlier offers, or establish how the present payment proposal would be funded. The proposed use of security for costs was also procedurally inappropriate without a separate application to vary or discharge the relevant order. Nevertheless, a short extension was just because the defendant would suffer little significant prejudice from a three-month delay. Payment in full was extended to 1 June 2024 and the action was stayed until then or earlier payment.
3. Unless order. The principles in Michael Wilson & Partners Ltd v Sinclair were applicable. The court’s discretion included consideration of the policy of interlocutory costs orders, access to justice under Article 6, alternative enforcement, the circumstances in which the original order was made, and the quality of evidence supporting impecuniosity. Where a party has no or insufficient assets in the jurisdiction and fails to provide proper evidence, payment may generally be required as the price of continuing the litigation.
4. The Hadkinson authorities required consideration of five conditions: contempt; deliberate and continuing contempt; an impediment to the course of justice; no other realistic and effective remedy; and proportionality. The court doubted whether those conditions materially differed from the principles in Michael Wilson, but found that both approaches produced the same result. The claimant’s continuing non-compliance impeded justice, no realistic alternative enforcement mechanism was available, and an unless order was proportionate. The unless order was therefore made, operative from 1 June 2024.

The judgment records that permission to appeal from the October 2023 judgment and order was refused by Coulson LJ on 7 December 2023. The present judgment determined applications concerning payment of the resulting judgment debt.